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Level 1
posted Feb 15, 2024 8:24:30 AM

I am a resident of SC and I work remotely for my employer in PA. They do not withhold any state taxes for either state, but on my W-2 it shows PA in box 16. What state(s) do I need to claim and pay state taxes to?

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1 Best answer
Level 15
Feb 15, 2024 8:53:55 AM

@kaebbaby --

 

 

Your resident state of SC can tax all your income, regardless of where you earn it.  If your employer does not withhold SC taxes, then you must make quarterly estimated tax payments to SC.

https://dor.sc.gov/forms-site/Forms/SC1040ES_2023.pdf  (reference shows the 2023 forms; the 2024 forms are not yet available online)

 

If you never physically worked within PA, then your income is not taxable by PA unless your employer provided you with a physical workspace inside PA and you chose to work remotely for your own convenience.  See this reference from the PA tax website:

How is telecommuting treated for Personal Income Tax purposes? (custhelp.com)

4 Replies
Expert Alumni
Feb 15, 2024 8:40:44 AM

As a resident of South Carolina, you are taxed on all your income regardless of where it is earned. In order to avoid double taxation, South Carolina allows a tax credit for taxes you paid to another state on wages earned in that state.

 

Nonresidents of Pennsylvania - PA law taxes the income you earn, receive and realize from PA sources.

 

A non-resident employee who is required to telework full-time from home in another state should treat his compensation as non-Pennsylvania source income even if his employer is located in Pennsylvania. In those situations, the employer is not required to withhold on the employee's compensation.  You would not be required to file a nonresident PA tax return.

 

Pennsylvania Department of Revenue - Telework Guidance

 

You will need to only file a South Carolina resident tax return.

 

@kaebbaby 

@TomD8 

 

[Edited 2/15/24 | 12:18ipm PST]

Level 15
Feb 15, 2024 8:53:55 AM

@kaebbaby --

 

 

Your resident state of SC can tax all your income, regardless of where you earn it.  If your employer does not withhold SC taxes, then you must make quarterly estimated tax payments to SC.

https://dor.sc.gov/forms-site/Forms/SC1040ES_2023.pdf  (reference shows the 2023 forms; the 2024 forms are not yet available online)

 

If you never physically worked within PA, then your income is not taxable by PA unless your employer provided you with a physical workspace inside PA and you chose to work remotely for your own convenience.  See this reference from the PA tax website:

How is telecommuting treated for Personal Income Tax purposes? (custhelp.com)

Level 1
Feb 15, 2024 11:42:53 AM

@TomK2023 

Can you help me understand why I would need to file a nonresident PA income tax, when all the money I made was while I was in SC. Correction Box 15 states PA, not box 16.

 

Expert Alumni
Feb 15, 2024 12:20:22 PM

Please see edited original post.  (You do not need to file a nonresident Pennsylvania tax return.)

 

@kaebbaby